Gen. 65] 65

PROCUREMENT

WHETHER STATE AGENCIES MAY USE THE “CONSTRUCTION

MANAGER AT RISK” PROJECT DELIVERY METHOD UNDER

THE STATE PROCUREMENT LAW

July 13, 2007

Bruce A. Myers, CPA

Legislative Auditor

Department of Legislative Services

You have requested our opinion whether State agencies may

use a method known as “Construction manager at risk” (“CMR”) to

carry out a construction project. You describe the CMR method as

commencing with a State agency’s procurement of a construction

manager by a competitive process. The construction manager is then

responsible for working in conjunction with the architect on the

design, providing a “guaranteed maximum price” for construction of

the project – accepting the risk that the cost of the project may

exceed that price – and procuring the actual construction of the

project. You question whether the CMR method, which generally

involves a competitive procurement process for the construction

manager only at the initial phase, improperly avoids requirements of

the State Procurement Law intended to foster competition.

In our opinion, State law does not prohibit the use of CMR as

a project delivery method, provided (a) the construction manager is

selected by one of the means authorized by the Procurement Law,

such as competitive sealed bidding or competitive sealed proposals,

or by the approved policies and procedures of agencies not subject

to the Procurement Law, and (b) the agency complies with any

applicable regulations and directives of the Board of Public Works.

The merits of CMR with respect to a particular construction project

will depend on how well the procurement is structured to provide the

winning construction manager with incentives to limit the cost of the

project while delivering it in a timely manner. The General

Assembly has delegated to the Board of Public Works the authority

to set policy under the Procurement Law. It is the role of the Board

to decide whether the use of CMR as a project delivery method in a

particular case is structured to be advantageous to the State and in

accordance with the general purposes of the Procurement Law. The

Board may wish to consider adopting regulations or policies to guide

agencies in structuring CMR contracts to meet these goals.
66 [92 Op. Att’y

 For purposes of this opinion, we need not survey other delivery 1

methods such as multiple-prime contracting, design-build, and agency

management services. See, e.g., Modern Real Estate Transactions: An

Overview of Architect and Construction Contracts, ALI-ABA Continuing

Legal Education (2006), SM 002 ALI-ABA 663. 

I

Background

A. Project Delivery Method v. Source Selection Method

It is important to distinguish between a project delivery method

and a source selection method, although there is inevitably some

overlap in the two concepts. “Project delivery” denotes the method

by which the design, construction, finance, risk management, and

other elements of a construction project are combined to carry out

the project. 1 Bruner & O’Connor, Construction Law §2:10 (May

2006). “Source selection” denotes the method by which the entities

or contractors that carry out the various stages or aspects of the

project are selected. The project delivery method may affect how

and when contractors are selected for different aspects of the project;

hence, the two concepts are not entirely distinct. A statute

prescribing specific methods of source selection for public contracts

might preclude certain project delivery methods. Id.

B. Construction Manager at Risk

“Construction manager at risk” (“CMR”) is a project delivery

method that is used by private and public entities to carry out

construction projects. CMR may be contrasted with a traditional

delivery method often referred to as “design-bid-build.” In the 1

design-bid-build method, the owner engages an architectural and

engineering firm to prepare a design of the facility, including

construction drawings, specifications, and contract packages. The

completed design package is let out for bid to interested general

contractors, with selection typically based on price – i.e., the lowest

bidder typically wins the contract. Each contractor bases its price on

contracts it has negotiated with specialty subcontractors. See 1

Bruner & O’Connor, Construction Law §2:11 (May 2006). The

general contractor, who had no role during the design phase, is

responsible for constructing the facility in accordance with the

design. Once the design phase ends and construction begins, the
Gen. 65] 67

design firm’s role is usually limited to responding to design

questions on behalf of the owner. 

The perceived advantages of design-bid-build are that the

design is completed before construction phase is priced, and that the

construction phase can thus be bid simply on the basis of the lowest

price. Id. This method is also identified with certain disadvantages:

because the contractor does not participate in the design phase, the

project loses the benefit of the contractor’s perspective on materials,

construction feasibility, and control of project costs (potentially

resulting in change orders that may add to the price); the process can

be slow and cumbersome; the competitive bidding process for the

construction phase may encourage bidding to minimum

specifications. Id.

In the CMR method, a construction manager acts as both

project coordinator during the design phase and also as general

contractor, with the same risk in the latter capacity as a general

contractor. See, e.g., Modern Real Estate Transactions: An

Overview of Architect and Construction Contracts, ALI-ABA

Continuing Legal Education (2006), SM 002 ALI-ABA 663.

Construction may begin before the design phase is completed. 

The owner of the project engages the construction manager

during the design phase of the project. The construction manager is

often chosen, at least in part, on the basis of qualifications as

opposed to price alone, and acts as a member of a collaborative

design team, providing pre-construction services such as schedule,

budget, and construction reviews. The construction manager may

assist the owner of the project in determining whether the design can

be built within the owner’s budget; if not, the direction of the design

work can be changed.

At some point during the process, the construction manager

and owner negotiate a guaranteed maximum price (GMP) for both

the construction management services and the construction itself

based on a partially completed design and the construction

manager’s estimate of the cost of the remaining design and

construction items. 2 Bruner & O’Connor, Construction Law §6:59

(May 2006). The owner may also require the construction manager

to post a bond for the GMP. See 63 Opinions of the Attorney

General 549, 551 (1978). If permitted by the terms of the contract,

the owner of the project may also seek competing proposals for a

GMP at that point. 
68 [92 Op. Att’y

As explained in footnote 6 below, a typical practice of agencies

2

using CMR in Maryland is to require the construction manager to

competitively bid the trade contracts before the GMP is negotiated.

The construction manager typically acts as the general

contractor during construction, assuming the risk of subcontracting

the work and guaranteeing completion of the project at the fixed,

negotiated GMP. 2 Bruner & O’Connor, Construction Law §6:59

(May 2006). The construction manager may bid and subcontract

portions of the work at any time. In entering into the trade

subcontracts, the construction manager assumes the risk that the total

cost will exceed the GMP. The construction manager is thus liable 2

to the owner for the subcontractors’ performance and to the

subcontractors for payment. Id. A CMR contract may provide that,

if the ultimate cost of the project is below the GMP, both the owner

and the construction manager may share the benefit of those cost

savings.

The perceived benefits of CMR are the ability to incorporate

a contractor’s perspective into planning and design decisions and to

fast-track early construction components prior to full completion of

design. “His expertise is thus used to avoid the dilemma common in

government procurements: discovering after bids are received that

the project design cannot be built within the project budget.” Nash

& Love, Innovations in Federal Construction Contracting, 45 Geo.

Wash. L. Rev. 309, 366-67 (1977). Moreover, as a prior opinion of

this Office concerning a school construction project noted, the GMP

clause “provides incentive to the construction manager to perform

its mission so that the school board receives a completed school

building at or below the guaranteed maximum price.” 63 Opinions

of the Attorney General 549, 555 (1978). A disadvantage of CMR

is the adversarial relationship that may develop between the

construction manager and the owner once construction begins and

tensions arise over construction quality, the completeness of the

design, and impacts to schedule and budget. See Construction

Management Association of America, Choosing the Best Delivery

Method for Your Project at 4 <http://cmaanet.org/best_delivery_

method.php>. Also, a construction manager providing a GMP may

have less incentive than a contractor participating in a competitive
Gen. 65] 69

 We express no view on the relative merits of CMR as compared 3

with any other project delivery method. As we explain below, the

determination of its merits for a particular type of procurement is the

responsibility of the Board of Public Works.

 This statute was enacted in 2004. Chapters 306, 307, Laws of 4

Maryland 2004. Pursuant to that law, the Board of Public Works has

recently adopted regulations that govern the State’s Public School

Construction Program and that deal with methods of both source selection

(COMAR 23.03.03) and project delivery (COMAR 23.03.04). See 34:10

Md. Reg. 891 (May 11, 2007), adopting regulations as proposed in 34:4

Md. Reg. 410 (February 16, 2007).

sealed bidding process to submit the lowest possible price. See 1

Bruner & O’Connor, Construction Law §2.13 (May 2006).3

C. CMR in Maryland

Since at least the late 1970s, some public entities in Maryland

have used CMR, although most such instances have not involved

contracts under the State Procurement Law. For example, CMR has

apparently been used on occasion for local public school

construction. In 63 Opinions of the Attorney General 549 (1978),

Attorney General Burch concluded that a local school board could

use a delivery method very similar to CMR, including a GMP

provided by a construction manager backed with a performance

bond, for a State-subsidized project without using competitive sealed

bids for source selection, if the school board employed a competitive

procedure to select the construction manager, did not permit the

construction manager itself to bid on construction work, and

obtained the approval of the Board of Public Works. See also

Annotated Code of Maryland, Education Article, §4-126(b)(2)

(authorizing the use of competitive negotiation for source selection

in conjunction with CMR or other “alternative project delivery

arrangements” for public school construction).4

We understand that the University System of Maryland, which

is largely exempt from the State Procurement Law, see Annotated

Code of Maryland, State Finance & Procurement Article (“SFP”),

§11-203(e), has used CMR in a majority of its capital construction
70 [92 Op. Att’y

 Although the University System is largely exempt, it is to comply 5

with written policies and procedures that are subject to review and

approval by the Board of Public Works. SFP §§11-203(e)(3). The USM

Board of Regents Policy (VIII-10.30 “Policy concerning Capital

Improvement Projects”) states that, for projects exceeding $10 million in

construction costs, “[t]he Board prefers that a construction manager be

utilized (via contract) to administer these projects.”

 For example, the University System requires the construction 6

manager to submit to the university a description of its bidding procedures

and the bidding documents it will provide to subcontractors. The

construction manager must issue the same solicitation package to all trade

contractors competing for award and the university to all meetings

between the construction manager and prospective trade contractors. The

University System reserves the right to reject any trade contractor

recommended by the construction manager. See, e.g., Construction

Management Services At Risk, Fine and Performing Arts Center, Bowie

State University, RFP No. 82410-B. 

 The GMP is to separately identify its component cost items, 7

including direct construction costs (trade contracts), alternates,

allowances, general conditions, construction manager contingency, and

construction manager construction services fee. Construction

Management Services At Risk, Fine and Performing Arts Center, Bowie

State University, RFP No. 82410-B at p. V-7.

 The construction manager develops a budget independent of the 8

design team and updates it at each of the three design submission stages.

See Construction Management Services At Risk, Fine and Performing

Arts Center, Bowie State University, RFP No. 82410-B at p. V-4. If the

(continued...)

projects for a number of years. The University System typically 5

begins the process by procuring a construction manager through

competitive sealed proposals. In developing a request for proposals

(“RFP”) for a CMR award, the University System requires that the

construction manager provide various services during the design

phase of the project (including constructibility reviews and cost

estimating), insists on close oversight of subcontracts entered into by

the construction manager, requires submission of the GMP after its 6

approval of the trade contractors, and includes provisions that the 7

University System and construction manager share any cost savings

at the end of the project under a specified formula. The construction

manager is to rework the project design or rebid the trade contracts

if the GMP exceeds the budget for construction. If the University 8
Gen. 65] 71

 (...continued) 8

budget exceedsthe original estimate, the construction manager and design

team work togetherto reconcile the disparity and, as necessary, to redesign

the facility. Id. at p. V-4, 5. The construction manager submits the GMP

after approval of the final construction documents. Id. at V-7.

 The statute exempts any capital project funded by the 9

Transportation Trust Fund from various “submissions and approvals”

required by the statute, but not from the authorization to use alternative

construction methods. SFP §3-602(i).

This statute was enacted in 1988 as a result of a recommendation 10

of the Legislature’s Special Joint Committee on the State’s Capital

Program, which studied ways to streamline the capital budgeting process.

The Department of State Planning (“DSP”), which had worked with the

committee to develop its recommendations, explained that these

procedures would “reduce the time necessary to complete a project by

(continued...)

System, or the Board of Public Works, rejects the GMP, the contract

with the construction manager terminates. See, e.g., Construction

Management Services At Risk, Fine and Performing Arts Center,

Bowie State University, RFP No. 82410-B at p. V-9, 12-13. During

construction, the construction manager acts essentially as a general

contractor while continuing to assist and advise the University and

its architect on continuing design issues. Id. at p. V-14.

Finally, the law governing the State capital program recognizes

that “alternative construction methods” – a concept that encompasses

CMR – may be used to carry out capital projects. SFP §3-602(g).9

The statute provides:

Total project funding may utilize alternative

construction methods, such as:

(1) design/build which involves a single

solicitation to design and build the facility;

(2) “fast track” in which design and

construction are implemented concurrently.

Although CMR does not always involve concurrent design and

construction work, it could be considered a form of “fast track” that

involves overlap of the design and construction phases of a project.10
72 [92 Op. Att’y

 (...continued) 10

abandoning the sequential process of program-design-constructionequipment” – i.e., the traditional design-bid-build project delivery method.

Testimony of DSP in Support of Senate Bill 154 (April 4, 1988). Acting

on this recommendation, the General Assembly passed Senate Bill 154,

which included the authorization for alternative construction methods in

SFP §5-309(g), and which was later recodified as SFP §3-602(g). See

Chapter 753, Laws of Maryland 1988; Chapter 540, Laws of Maryland

1989.

 Division II consists of Titles 11 through 19 of the State Finance 11

& Procurement Article. 

 The Board does not review capital expenditures by the 12

Department of Transportation or the Maryland Transportation Authority

for State roads, bridges or highways. SFP §§12-101(a), 12-202. In

practice, neither agency uses CMR for these projects.

In any event, an agency subject to the Procurement Law may only

use a “fast track” method consistently with that law. 

II

Analysis

You have asked whether the State Procurement Law precludes

the use of CMR for State construction contracts.

A. State Procurement Law

The State Procurement Law, which occupies Division II of the

State Finance & Procurement Article, seeks to employ broad-based 11

competition and fair and equitable procedures to maximize the

purchasing power of the State and to ensure the integrity of the

procurement process. SFP §11-201. Subject to certain exceptions,

the Procurement Law governs the procurement of construction and

construction services by State agencies. See SFP §§11-101(m), (n),

11-203, 11-204(a).

Within the parameters of the statute, the Board of Public

Works has general authority over State procurement, including the

authority to establish policy, adopt regulations, and create

procedures. SFP §12-101(b)(2). The Procurement Law “looks ...

12

for the [B]oard to set basic procurement policy subject to the statute
Gen. 65] 73

 Some states have specifically authorized the use of CMR by 13

statute. See, e.g., Ariz. Rev. Stat. §34-101(4) (defining “constructionmanager-at-risk”); Ariz. Rev. Stat. §34-602; 5 Me. Rev. Stat. Ann. §1743;

Mass. Gen. Laws Ann. 149(A), §2; N.C. Gen. Stat. Ann. §143-128.1; S.D.

Con. Laws §5-18-47; Vernon’s Tex. Stat. & Codes Ann., Government

Code, §2166.2532. 

Other states make use of CMR even in the absence of specific

statutory authorization. See Illinois Office of Auditor General, State’s

Construction Contracting Methods(2002) at p. 44. (reporting that Florida

relied on CMR for approximately 80% of its construction projects,

although there was no specific statutory authorization for that method of

project delivery). In states without a statute specifically authorizing CMR,

Attorneys General have reached varying conclusions about the use of

CMR by state agencies, although those conclusions may depend on

whether a competitive process would be used to select the construction

manager. Compare Miss. A.G. Opinion No. 2006-00165, 2006 WL

1966819 (May 19, 2006) (state agency may not use CMR if construction

manager is not selected on the basis of competitive bidding) with S.C.

A.G. Opinion, 2004 WL 2247471 (October 1, 2004) (CMR not prohibited

despite absence of explicit statutory authorization; opinion describes

competitive negotiation process for selection of construction manager). 

 Since its inception, the Procurement Law has focused on source 14

selection to ensure fair competition and the other goals encompassed by

that law. See Chapter 775, Laws of Maryland 1980 at p. 2666.

....” Alan M. Wilner, The Maryland Board of Public Works: A

History (1984) at p. 117; see also ARA Health Services, Inc. v. Dep’t

of Public Safety and Correctional Serv., 344 Md. 85, 93, 685 A.2d

435 (1996). The Board has adopted comprehensive regulations, as

well as policies, addressing most aspects of State procurement. See

COMAR Title 21 ; see also <www.bpw.state.md.us/bpw_ad.asp>

(Board of Public Works procurement advisories).

B. Application of State Procurement Law to CMR

Source Selection

As you noted, the Procurement Law does not mention CMR.13

However, the statute generally does not address project delivery

methods. Rather, it authorizes a number of methods of source

selection, with preference given to competitive methods. Except 14

for architectural and engineering services and information

technology contracts, all procurement is to be by competitive sealed

bids, unless one of the following methods is specifically authorized:
74 [92 Op. Att’y

 Cost-plus-a-percentage-of-cost contracts are prohibited. SFP §13- 15

214(b); COMAR 21.06.03.01A.

competitive sealed proposals, noncompetitive negotiation, sole

source procurement, emergency or expedited procurement, small

procurement, an intergovernmental cooperative purchasing

agreement, or auction bids. SFP §13-102(a); see also COMAR

21.05.01.01 (same). The law also describes circumstances in which

the alternative methods of source selection may be employed. For

example, competitive sealed proposals may be used in a number of

circumstances, including circumstances where the head of the unit

determines that there is a need to use that method and the use of

competitive sealed bidding “is not practicable or not advantageous

to the State.” SFP §13-104(a)(3).

As noted in Part I of this opinion, contracts that involve CMR

are typically procured by means of a competitive process, such as

competitive sealed proposals, that may take into account bidder

qualifications. Competitive sealed proposals are specifically

authorized under the State Procurement Law when the procurement

officer, with the unit head’s approval, determines that the use of

competitive sealed bidding is not practicable or advantageous. SFP

§§13-102(a)(1), 13-104(a). It is our understanding that the

competitive sealed proposal method is usually used for a CMR

contract. 

Cost and Price Principles

The Procurement Law directs the Board of Public Works to

adopt regulations on price and cost principles for State procurements

that can be used as guidelines for negotiations on estimated costs,

fixed prices, and contract modifications. SFP §13-213. Such

regulations are found at COMAR 21.06.03, 21.06.04, and 21.09.01.

CMR can be utilized consistently with those regulations. For

example, a pertinent regulation lists particular contract types, or

pricing methods, in the following order of preference: fixed-price,

fixed-price incentive, cost plus incentive fee, and cost-plus fixed fee

or cost-reimbursement. COMAR 21.06.03.01B. Similarly, while

the Procurement Law permits a unit, subject to an exception, to 15

enter into a pricing method “that will promote the best interests of

the State,” the statute directs the unit “[i]f practicable . . . [to] give

preference to a fixed-price form of procurement contract.” SFP §13-

214(a)(2). CMR is an example of a fixed-price contract. 
Gen. 65] 75

 For example, we understand that the University System uses the 16

applicable MBE goals to its CMR contracts. 

Contract Modification Procedures

A CMR contract necessarily involves a substantial

modification of the cost of the contract when the GMP is set. Under

the State Procurement Law, a contractor must certify cost and price

information when a contract modification will exceed $100,000. See

SFP §13-220; COMAR 21.06.04.01. A contract modification is also

subject to certification by the fiscal authority that the increase in cost

will not exceed budgeted funds. See COMAR 21.03.03.01,

21.07.02.02. In addition, unless an agency has been delegated

contracting authority by the Board of Public Works, the agency must

obtain Board approval prior to agreeing to a modification of

procurement contract. See COMAR 21.02.01; ARA Health Services,

Inc., 344 Md. 85, 93-94, 685 A.2d 435 (1996). Assuming that an

agency complies with these procedures and obtains the necessary

certifications and approvals, a CMR contract could be implemented

under these procedures. 

The regulations on cost and price principles can be used in

establishing the GMP for purposes of the modification procedures.

Basing the GMP on prices obtained from competitively bidding the

trade subcontracts (as is typically the case with State CMR contracts)

can ensure that the CMR contract is consistent with SFP §13-220

and COMAR 21.06.04.01, and provide a basis for the Board to

determine that the GMP is reasonable. The costs principles in

COMAR 21.09.01.05 also provide guidance to an agency in

negotiating a CMR contract’s general conditions cost and

management fee, typically the smallest components of the GMP, and

the only components that would not be the subject of some form of

competitive pricing.

Procurement Preferences

Title 14 of the State Procurement Law establishes various

preferences in State procurement, including programs related to

blind and disadvantaged individuals, small businesses, and minority

business enterprises (MBEs). Nothing in a CMR contract would

appear to inhibit an agency from complying with its obligations

under these provisions of the Procurement Law.16
76 [92 Op. Att’y

Thus, while the Procurement Law does not expressly mention

CMR, neither does it prohibit the use of CMR, and it appears that

CMR contracts as they are typically structured can comply with the

applicable regulations under the Procurement Law.

C. Compliance with Board Policies Addressing CMR Contracts

Even if a competitive source selection method is used to

choose a construction manager for a CMR contract and the contract

modification procedures are followed, the use of this project delivery

method may be at odds with basic principles animating the

Procurement Law. For example, the GMP generally will represent

most of the cost of the contract and is not itself a subject of

competitive bidding. In such circumstances, the State Procurement

Law contemplates that the Board of Public Works will provide

direction to State agencies under its delegated authority to adopt

regulations and policies governing State procurement and to approve

State contracts. 

The Board has already adopted certain practices in connection

with awards of contracts that involve use of CMR by agencies that

are not subject to the Procurement Law. In practice, the Board has

required that an agency obtain its approval twice in connection with

a procurement that utilizes CMR. First, when an agency that

contemplates using CMR awards a pre-construction services contract

to a construction manager, that contract is to be presented to the

Board for its approval. Second, when the agency later seeks to

modify the contract to add the GMP, including the trade contracts

and the construction services fee, the agency returns to the Board

again for approval of that modification. 

The Board has recently included more detailed guidelines on

the use of CMR and other methods in its regulations that govern

local public school construction supported by State funds. See

COMAR 23.03.04.06. Those regulations condition the receipt of

State funds on the use of certain approved methods of source

selection to choose the construction manager, including competitive

bidding, quality-based selection, competitive negotiation, and other

methods. COMAR 23.03.04.06D(4). In addition, before it

negotiates a GMP with a construction manager who has provided

pre-GMP services, the local education agency must allow for the

submission of competing proposals after giving public notice.

COMAR 23.03.04.06B(2)(b). 
Gen. 65] 77

 Typically, the trade contracts will be between the trade contractors 17

and the construction manager, not the agency. If the agency were a party

to those contracts, they would be subject to the solicitation requirements

of the State Procurement Law. 

The General Assembly recently amended the Public Ethics Law 18

to achieve a similar result by expanding the use of the design-build

delivery method. See Chapter 84, Laws of Maryland 2004. That law

amended State Government Article §15-508 to permit engineering firms

to participate in the preliminary engineering phase of design-build projects

without, in most cases, being disqualified from participating in the

construction contract for the project. 

The 2004 legislation was apparently needed because some designbuild contracts involve separate design and construction contracts and the

engineering firm’s participation in the design of the specifications for the

construction contract could disqualifyit under the Public Ethics Law from

later participation in the construction contract. CMR, on the other hand,

typically requires only a single contract for design and construction. See,

(continued...)

In an analogous context, the Board of Public Works has

developed a written policy requiring an agency wishing to use a

method other than competitive sealed bidding for new construction

or renovation to explain to the Board prior to the solicitation why the

other method was chosen and the expected benefits of the other

method. See Board of Public Works, Secretary’s Agenda, Item 30

(Policies and Procedures Manual) (September 4, 1991); see also

Board Procurement Advisory 1999-1 (two-stage process for the

design-build delivery method), available at <www.bpw.state.md.us>.

The Board requires that an agency follow the same procedure

“whenever a design/build or variant of that method is proposed for

a construction project and is to be used in lieu of the traditional A/E

contract.” Id. 

Finally, as noted above, agencies that currently use CMR with

Board approval have typically required that trade contracts be

competitively bid by the construction manager with agency

oversight. (Such oversight is generally lacking in the standard 17

competitively bid contract, where the State has no participation in or

control of the general contractor’s procurement and contracting with

subcontractors). Thus, whether the benefits of competition can be

retained in a delivery method that allows for the construction

manager to provide useful input to better estimate or reduce costs

during the design phase will depend on the procedures used in

formulating this type of contract.18
78 [92 Op. Att’y

 (...continued) 18

e.g., Choosing the Best Delivery Method for Your Project at 4-8; Modern

Real Estate Transactions: An Overview of Architect and Construction

Contracts, ALI-ABA Continuing Legal Education (2006), SM 002 ALIABA 663. 

 The Legislative Auditor recently criticized, on policygrounds, the 19

Maryland Stadium Authority’s use of CMR for a particular procurement.

See Office of Legislative Audits, Audit Report - Maryland Stadium

Authority (February 2007) at pp. 9-11.

D. Summary

The State Procurement Law primarily focuses on source

selection and does not directly address project delivery methods such

as CMR. Because only the selection of the construction manager,

which represents a fraction of total project costs, is done by a

competitive procurement by the agency, there is a possibility that the

CMR method could be misused to avoid competition or that an

absence of competition when the GMP is set could prove detrimental

to the State. The Board may wish to adopt regulations or policies 19

– e.g., competitive bidding and agency oversight of the

subcontracting process, agreement on a GMP, two-stage review by

the Board – to ensure that the use of CMR is consistent with the

statute’s goals of fostering competition and providing increased

economy in the procurement system. 

III

 Conclusion

For the reasons stated above, State law does not prohibit the

use of CMR as a project delivery method, as long as (a) the

construction manager is selected by one of the source selection

methods authorized by the Procurement Law, such as competitive

sealed bidding or competitive sealed proposals, or by the approved

policies and procedures of agencies not subject to the Procurement

Law, and (b) the agency complies with any applicable regulations

and directives of the Board of Public Works. The merits of CMR

with respect to a particular construction project will depend on how

well the procurement is structured to provide the winning

construction manager with incentives to limit the cost of the project

while delivering it in a timely manner. The General Assembly has

delegated to the Board of Public Works the authority to set policy
Gen. 65] 79

under the Procurement Law. It is the role of the Board to decide

whether the use of CMR as a project delivery method in a particular

case is structured to be advantageous to the State and to satisfy the

goals of the Procurement Law. The Board may wish to consider

adopting regulations or policies to guide agencies in structuring

CMR contracts to meet these goals.

Douglas F. Gansler

Attorney General

Mark J. Davis

Assistant Attorney General

Robert N. McDonald

Chief Counsel

 Opinions and Advice*

*Assistant Attorney General Dana A. Reed contributed significantly

to the preparation of this opinion.